ACIF FORECASTS THE OUTLOOK FOR CONSTRUCTION IS ‘STEADY AS SHE GOES’

The latest industry forecasts indicate that building and construction work activity in 2018-19 will fall by 5% to $239 billion. The outlook for building and construction activity will be finely balanced, with the current uptick in Non-Residential Building activity combined with surging Engineering Construction activity expected to largely offset the downturn in Residential Building activity.

“The recent upturn in Non-Residential Building has offset falls in Residential Building activity. While this has been quite important in sustaining workflow, it must be recognised that Non-Residential Building activity will not be enough by itself to offset the declines in Residential Building activity.” said Bob Richardson, Chair of ACIF’s Construction Forecasting Council, which oversees the production of the ACIF Forecasts.

Residential Building Activity

Residential Building activity is already in decline with a contraction of 1.5% is expected this year (2018-19), bringing the value of work done to $103 billion. Recent falls in house prices and deteriorating market conditions are expected to drive steeper falls in Residential Building activity with the value of building work projected to fall to $91 billion by 2020-21.

Building and Construction Work Done ($ billion)

Non-Residential Building Activity

In contrast to the Residential Building market, Non-Residential Building is midway through a growth phase, with the value of work rising by 11% last year (2017-18) to reach $42 billion. Expanded investment in accommodation, offices, and other commercial buildings has buoyed Non- Residential Building activity. Government and public sector investment are also supporting growth especially in education, defence and community facility projects.

Engineering Construction Activity

Work done in Engineering Construction grew by 21% last year to reach $67 billion. Continued strong growth is forecast, raising work done to $76 billion in 2020-21. Significant and sustained increases in construction of transport infrastructure and in utilities projects is underway and gathering momentum. Heavy industry including mining is expected to see a reduction of $11 billion in the value of work done this year but is forecast to recover and grow at 6-8% per annum over the next two years.

Building and Construction Employment

Employment in building and construction activities is expected to lose 29,000 jobs this year, falling to 1.1 million jobs. This accounts for 9.2% of expected employment across the Australian economy in 2018-19. Construction employment is projected to hover around 1.15 million jobs over the next three-to-four year period, reflecting expectations that workers displaced from the cyclical downturn in Residential Building activity will be largely soaked up through burgeoning Engineering Construction activity and continuation of the upturn in Non- Residential Building activity.

Industry Outlook

Although the downturn in the residential market may spill over into the rest of the economy reducing consumer confidence, eroding already fragile investment intentions, and dragging down growth – the level of total building and construction work is projected to stabilise and hover around $240 billion a year over the next two-to-three years.

About Australian Construction Industry Forum (ACIF)

Australian Construction Industry Forum (ACIF) is the trusted voice of the Australian construction industry. ACIF facilitates and supports an active dialogue between key players in residential and non-residential building, and engineering construction, other industry groups, and government agencies. ACIF’s focus is on innovation, collaboration, equity and sustainability for the industry.

ACIF Members are among the most significant associations in the industry, spanning the entire asset creation process from feasibility through design, cost planning, construction, building and management. ACIF harnesses the resources of its Members to research and develop initiatives that benefit businesses of all sizes, from the largest of construction companies to small consultancies. More information on ACIF is available from www.acif.com.au.

About ACIF Forecasts

ACIF Forecasts are rolling ten-year forecasts of demand across residential, non-residential and engineering construction in Australia. The Forecasts are prepared by respected economic modellers, using high quality data sources, and are overseen by ACIF’s Construction Forecasting Council, an industry panel of expert analysts and researchers.

ACIF Forecasts are used by thousands of professionals each year, from across the full range of stakeholders, from major organisations to small consultancies. ACIF Forecasts are available as the Australian Construction Market Report and detailed numbers are available by subscribing to the Customised Forecasts Dashboard. More information about ACIF is available from www.acif.com.au.

The ACIF Forecasts are available from Australian Construction Industry Forum from today. Available in two formats: Australian Construction Market Report, a 100-page expert analysis on the economy and industry sectors ($300), plus the Customised Forecasts Dashboard ($250), an online portal where users can query the full ACIF Forecasts database on 20 work types, over a twenty year period. As an industry not-for-profit, ACIF produces this information to assist businesses and governments at all three levels navigate the rapidly changing marketplace and help them plan for the future. Find out more at www.acif.com.au/forecasts.

MORRISON GOVERNMENT RESPONSE TO THE AUSTRALIAN CONSTRUCTION INDUSTRY FORUM

A fair and balanced workplace relations system is the foundation of a strong economy and higher living standards for all Australians. We know that the key to better workplaces lies in workplace relations policies that support job creation, business growth and the rule of law.

 

The Morrison Government through re-calibrating workplace laws to support these areas has created over 1.2 million more jobs, and reduced the number of days lost to industrial action by 40 per cent.

Now is not the time to change direction. We need to stay the course to create 1.25 million more jobs over the next five years, including 250,000 jobs for young Australians, support more businesses to start and grow, and to uphold the rule of law in workplaces.

The Morrison Government has restored the rule of law to workplaces through reforms that encourage cooperation and workplace-level negotiation to ensure both workers and employers can build and benefit from a stronger economy.

There is more work to do to ensure this record of job creation and more cooperative workplaces continue. Now is not the time to turn the clock back to the 1970s and put Australia on strike.

The achievements of the Morrison Government to ensure productive and fair workplace relations include:

  • re-establishing the Australian Building and Construction Commission, to ensure small contractors and subbies can access our third largest industry without fear of intimidation, bullying and unaffordable cost imposts;
  • abolishing the never-ending award review process that created uncertainty while sapping a disproportionate amount of time and money from small business;
  • ensuring union bosses are held to the same standards as company directors by establishing the Registered Organisations Commission; and
  • ending the ‘strike first, talk later’ approach to industrial relations, instead requiring that protected industrial action can only be taken once negotiations on an enterprise agreement have begun.

Bill Shorten’s Labor wants to scrap the ABCC and the ROC, legalise industry-wide strikes for the first time ever, allow unions to veto free trade agreements and allow politicians to set minimum pay rates. They want to give union bosses the upper hand in workplace negotiations by banning employers from terminating expired enterprise agreements and forcing employers to compulsory arbitration.

Their policies would stifle business, risk jobs and cause disruption across Australia. When it comes to industrial relations, the choice could not be clearer.

Commitment by state and federal governments to implement the recommendations of the Shergold-Weir Report by February 2021.

On 13 March 2019, the Building Ministers’ Forum (BMF) published a joint implementation plan responding to the recommendations of the Building Confidence report by Peter Shergold and Bronwyn Weir.

The plan sets out reforms both planned and underway in each jurisdiction. States and territories have agreed that wherever possible jurisdictions will adopt reforms consistent with those in place or proposed in other jurisdictions.

While the BMF has given in-principle agreement to all recommendations in the report, the immediate focus will be on reforms to the integrity and transparency of building certification processes. The BMF will initially focus efforts on exploring a consistent approach to the registration and training of practitioners and the responsibilities of design practitioners.

Support for the Building Information Modelling Strategy of Australasian BIM Advisory Board.

Along with re-establishing the ABCC, the Coalition introduced a new function for the Federal Safety Commissioner (FSC) to audit compliance with National Construction Code (NCC) performance requirements in relation to building materials.

Under the changes, compliance with the NCC is now a condition of accreditation by the FSC. Accredited companies therefore face losing access to Commonwealth funded building work if they fail to comply with performance specifications of building materials under the NCC.

The Australian Building & Construction Commission to be retained.

Getting paid on time for work done is fundamental to all businesses, including the many subcontractors who make up our construction industry. The Morrison Government is committed to improving protections for individuals and small businesses who subcontract in the building and construction industry, and to achieving greater consistency in security of payment laws across Australia.

We have re-established the Australian Building and Construction Commission (ABCC) which enforces the security of payment requirements in the Code for the Tendering and Performance of Building Work 2016. Under the code, contractors that have tendered for Commonwealth-funded building work must adhere to state and territory security of payment laws.

They must pay their subcontractors on time and not unreasonably withhold payment, otherwise they risk being excluded from Commonwealth funded building work for up to twelve months. This important work would be undone if Labor were to be elected, given its plans to abolish the ABCC and the Building Code.

The implementation of an effective regime to be established to minimise the use of non- conforming building products.

The Commonwealth does not have constitutional power to regulate buildings.

The Morrison Government is committed to working with state and territory counterparts to restore public confidence in Australia’s built environment.

The National Construction Code has always restricted the use of combustible cladding on high-rise buildings, and prior to fire incidents in recent years, the Commonwealth, states and territories had no reason to believe that building practitioners were not complying with the NCC.

The inappropriate use of cladding is an issue of non-compliance with the NCC and state and territory building regulations. Enforcement of these rules is the responsibility of state and territory governments.

Building Ministers’ Forum (BMF) actions on cladding

The prevention of the inappropriate use of aluminium composite panels (ACPs) has been a key area of focus for the BMF.

The BMF expedited the implementation of a comprehensive package of measures by the Australian Building Codes Board (ABCB), to prevent non-compliant use of wall cladding on high- rise buildings.

The out-of-cycle amendments to the NCC include:

  • a more rigorous testing standard for determining the fire safety of external wall assemblies (AS 5113:2016);
  • introduction of a new Verification Method to demonstrate compliance with the existing fire safety Performance Requirements;
  • increased stringency for the sprinkler protection of balconies on residential buildings; and
  • stricter compliance documentation requirements in the NCC’s evidence of suitability provisions.

State Ministers agreed in October 2017 to use their powers to prohibit the inappropriate use of these products on buildings of more than three storeys.

At their February 2019 meeting Ministers agreed to expand this to a total ban in new construction subject to an impact assessment.

A number of other significant reforms continue to be progressed by the BMF, including:

  • development of a Technical Standard for permanent labelling of aluminium composite cladding products (etched or printed), ahead of development of an Australian Standard, to prevent unsuitable product substitution
  • the Building Regulators’ Forum working with fire authorities on the best method of making information available to assist them to respond to buildings with ACPs, and
  • overseeing the cladding audits and reviews being undertaken across

The BMF is also considering ways to address the cost of cladding rectification works, and has given in-principle support that building practitioners should owe a duty of care to building owners (and subsequent building owners) for residential construction work and certain commercial construction or small business.

Further, I received the following response from Pauline Hanson’s parliamentary advisor:

Thank you for your letter of 4 April and the enclosed brochure outlining ACIF’s policy priorities.  Senator Hanson has asked me to respond on her behalf that she is supportive of these and certainly that the Australian Building and Construction Commission be retained.  Together with other One Nation Senators she will do what she can to ensure this happens. 

QUEENSLAND GOVERNMENT’S SAFER BUILDINGS PROGRAM ON TRACK

 

 

 

The Queensland Government’s Safer Buildings Combustible Cladding Checklist program has cleared almost 14,000 private buildings, confirming they’re safe and secure for tenants and workers.

The program, established in 2018, was designed to ensure all Queensland buildings meet safety requirements regarding building material use and provide occupants a ‘right to know’ if their home or workplace doesn’t pass the test.

Under the program, conducted in three parts, almost 14,000 private building combustible cladding assessments have already been completed and cleared, with two more years to go until the completion of the entire audit program.

Minister for Housing and Public Works Mick de Brenni said that, to date, under Part 1 of the program, 13,715 registrants out of 20,380 successfully completed the audit at zero cost. The remaining 5026 registrants in the program will take Part 2 to rule out that the building is clad in combustible material.

“It’s been very pleasing to see that 14,000 building owners doing the right thing and clearing their building as safe,” said Mr de Brenni.

“Having almost 14,000 buildings registered means those who live and work there will now have peace of mind.

“This program was designed to crack down on careless use of building materials that put lives at risk, and building occupants have a right to know if their building is at risk.

“After several fires in other states, the Commonwealth commissioned a national review that identified failure to comply with fire engineering guidelines had become a serious issue over many years, confirming that the Queensland process was indeed required.

“The Shergold Weir Review showed that a minority in the building industry had failed to follow the rules and was putting lives at risk.”

Mr de Brenni said the building materials sector had worked hard to ensure that information about the safe use of materials was made available to consumers and builders.

“Building materials, when used in accordance with the manufacturer’s instructions are safe – that’s why manufacturers publish details of how they should be used. These details must be available and are usually easily identified on the manufacturer’s website.

Mr de Brenni said that Part 2 of the Safer Buildings program will give building owners until 29 May 2019 to seek professional advice to confirm if their building meets the Safer Buildings guidelines.

“We will not risk discovering the next unlawful use of combustible cladding through a loss of Queenslanders lives in a high rise building fire like those overseas.

“Building owners who already know or suspect they have combustible cladding on their building are able to progress directly to Part 3 of the program, saving the cost of engaging a building industry professional.

“So far the Safer Buildings process has done exactly what it needed to do – and thankfully owners are treating this issue seriously. It’s heartening to see that tenants’ safety is being put first, especially by those building owners going ahead to Part 3 of the program.

Building owners required to complete Part 2 of the Safer Buildings combustible cladding checklist before 29 May 2019 can find more information here: www.saferbuildings.qld.gov.au

 

2019 POLICY PRIORITIES OF ACIF

The Australian Construction Industry Forum calls on Australia’s political parties to consider and adopt ACIF’s policy priorities.

 

The Australian construction industry employs over 1.2 million Australians, and in 2017-18 had a turnover of $248 billion.

Therefore, the construction industry is one of the main drivers of the Australian economy and its productivity and success is critical to the growth and success of the Australian economy.

Given the importance of construction to the Australian economy and people, ACIF advocates that the Federal Government and all State and Territory Governments have dedicated construction ministers. This would result in better outcomes for the industry, and enhance a critical sector of the Australian economy.

ACIF (of which the AIB is a current member) has the following policy priorities for 2019:

  • Commitment by state and federal governments to implement the recommendations of the Shergold-Weir Report by February 2021.
  • Support for the Building Information Modelling Strategy of Australasian BIM Advisory Board.
  • The Australian Building & Construction Commission to be retained.
  • The implementation of an effective regime to be established to minimise the use of non-conforming building products.

 

Download ACIF 2019 Policy Priorities

Download Australian Labor Party Official Response

CONTRACTOR APM ISSUED EXCLUSION SANCTION FOLLOWING BUILDING CODE BREACH

 

 

 

Media Release 10 April 2019

A Victorian building company has been issued a one-month exclusion sanction for its failure to comply with state security of payments legislation.

The exclusion sanction, imposed by the Minister for Jobs and Industrial Relations, Kelly O’Dwyer, means APM Group (Aust) Pty Ltd (APM) and its related entity APM Holdings (Aust) Pty Ltd are excluded from expressing interest in, tendering for, or being awarded Commonwealth-funded building work for the one-month exclusion period, 1 May 2019 to 31 May 2019.

APM was found to have breached the Building Code 2013 by failing to pay a subcontractor over

$40,000, and failing to resolve a payment dispute with a subcontractor in a reasonable, timely and cooperative way.

In the course of its dealings with the subcontractor, APM’s conduct included:

  • Threatening to ‘cash’ the subcontractor’s bank guarantees if it proceeded with an application for adjudication;
  • Applying pressure on the subcontractor not to exercise its statutory rights to suspend works; and
  • Withholding the subcontractor’s retention amounts (bank guarantees) from prior projects beyond the defect liability period to pressure the subcontractor to perform works on a current project.

APM failed to pay progress payments to the subcontractor even after an independent adjudicator had determined the claim should be paid.

ABCC Commissioner Stephen McBurney said subcontractors deserved to be paid on time and that in many cases their livelihood depended upon it.

“In this instance, APM’s conduct had a significant impact on the subcontractor both emotionally and financially,” Mr McBurney said.

“APM’s failure to pay the subcontractor compromised the ability of the subcontractor to pay their bills and put pressure on their relationship with suppliers.

“APM’s failure to abide by the independent adjudication outcome also undermines the statutory regime implemented to address security of payment issues.”

There are a number of requirements placed on code covered entities that are intended to help ensure progress payments are made in a timely manner. Code covered entities must also report disputed or delayed progress payments to the ABCC.

The APM sanction is the first exclusion sanction relating to non-compliance with security of payments laws since the ABCC launched its Security of Payment campaign in July 2018.

SECTIONS OF OPPOSITION LEADER BILL SHORTEN’S 2019 BUDGET REPLY RELEVANT TO CONSTRUCTION

Ending Negative Gearing on Older Investor Properties

If you’re currently negatively gearing the rules won’t change. If you want to use it on new homes, you still can. But we cannot have property investors playing with loaded dice against our young people, Generation Y and the Millennials. And instead of patronising millions of young Australians with lectures about cutting back on smashed avo. Why don’t we tell them the truth: Getting together a 20 per cent deposit – plus stamp duty – is so much, much harder than it was 20 or 25 years ago.

And it’s even more difficult, when your government uses your taxpayer money to subsidise the property investors bidding against you. The intergenerational bias that the tax system has against young people must be called out. A government has to be brave enough and decent enough to stop the bias against first home buyers and young Australians.

Extra TAFE Spending

And when everyone has an equal chance to fulfil their potential. This is why investing in the future, always begins with education.

This is where the difference between Labor and the Government could not be more stark. Nine out of ten new jobs created in the next four years will require either a university degree or a TAFE qualification. Only a Labor Government will be prepared to properly fund both. We’ll uncap university places, opening the doors of higher education to an additional 200,000 Australians. And when it comes to vocational education, Labor is backing public TAFE all the way. I’ve been fortunate to have visited about 30 TAFEs around Australia since the last election. The teachers and students are inspirational. So tonight I’m pleased to announce that we are going to double the size of our Rebuilding TAFE fund – up to $200 million to renovate campuses in regional and outer-suburban Australia. This will mean:

  • This will mean new facilities for training nurses in Caboolture and Devonport.
  • New workshops in Midland and Bellevue, to make sure the METRONET train carriages work goes to apprentices.
  • A new construction centre for tradies in Chadstone and Frankston.

And so much more. Labor will also pay the upfront fees for 100,000 TAFE places to get more Australians training in high-priority courses.

Building Program

Building an economy that works for everyone means a massive building program, right across our nation. We will reinvigorate jobs in the construction sector:

  • With our Build-to-Rent plan.
  • Targeting Negative Gearing to new housing.
  • Renovating the national energy grid with new pipelines, interconnectors, hydro and storage.
  • Launching the biggest affordable housing program since the Second World War – building a quarter of a million new homes.

And we will invest in safe accommodation for women fleeing violent relationships. Because too often, when the worst happens, people still say: “Why didn’t she leave?” What we should ask is: “Where would she go?” Mr Speaker Labor has transport plans and projects ready to go in every state and territory:

  • Cross River Rail in Brisbane
  • Western Sydney Metro
  • Suburban Rail Loop in Melbourne
  • The Bridgewater Bridge in Tassie
  • South Road in South Australia
  • METRONET in Perth
  • Upgrading the roads around Kakadu
  • And Phase 2 of the ACT light rail.

And – thanks to Albo’s hard work – the work is just beginning. Labor will continue to develop and support the development Northern Australia: including overdue upgrades for the beef roads and the Rocky ring road. And tonight I can announce we will deliver $1.5 billion to upgrade the Gateway Motorway from Bracken Ridge to the Pine River – and the next stage of the Bruce Highway from the Northern Suburbs to Caboolture. There’s another big difference between Liberal and Labor on infrastructure. In their budget you have to vote for the current Prime Minister at this election… … then you have to vote for whoever is their leader at the next election… …and that’s before anyone even digs a hole. Our projects are not on the never-never, they are locked in to our first budget.

Infrastructure Australia to be Non-Partisan

There’s another difference that I offer the Australian people, frustrated by the constant short- termism in the infrastructure debate. If we are elected, I will invite the then-Opposition Leader to be involved in nominating directors to Infrastructure Australia, so we take the politics out and we make generational decisions in infrastructure for once and for all time. And every time we invest Commonwealth dollars in infrastructure projects.

Apprenticeships

We’ll make the rule that 1 in 10 people employed must be an Australian apprentice. Mr Speaker The bad news is that over the last six years under the Liberals, apprenticeships have fallen by 150,000. The good news is because of our vision:

  • in infrastructure housing construction
  • the NDIS
  • TAFE and training
  • early childhood education
  • energy
  • and the digital economy

…a Labor Government can repair the damage done. Tonight, I say we will help train 150,000 apprentices for the jobs of the future. We will provide additional support for businesses which take them on – both young people and mature age workers looking to re-train and to learn new skills.

And we’ll create an Apprentice Advocate – because the tragic death of an 18 year old apprentice on the Macquarie Park site last week, reminds us that we’ve got to protect our apprentices and they have the same right to come home safe as everybody else.

Wages and Security of Payment

Only Labor has a concrete, practical plan to get wages moving again.

  1.  If we win the election we will legislate to restore the arbitrary cuts to Sunday and public holiday penalty rates in our first 100
  2. We will stop companies using sham contracts and dodgy labour hire arrangements to cut people’s pay
  3. Our Tradie Pay Guarantee means that subbies working on Commonwealth projects get paid on time, every time.

2019 FEDERAL BUDGET SUMMARY FROM INFRASTRUCTURE PARTNERSHIPS AUSTRALIA

 

 

 

With thanks to Infrastructure Partnerships Australia for providing the 2019 Federal Budget Summary.

Click here to view full summary

THE AUSTRALIAN GOVERNMENT WILL PROVIDE FUNDING TO SUPPORT NATIONAL INFRASTRUCTURE PROJECTS FOLLOWING LAST NIGHTS FEDERAL BUDGET

The Australian Government will provide funding to support national infrastructure projects following the release of last night’s Federal Budget.

Download the Budget 2019-20 Federal Financial Relations Budget Paper No.3 here

DISCUSSION PAPER ON ALUMINIUM COMPOSITE PANEL PRODUCT LABELLING

Aluminium Composite Panels (ACP) have been at the centre of a number of investigations in Australia and around the world. The development a permanent labelling system for ACP has been identified as a necessity. Standards Australia is seeking advice from industry and other stakeholders on the proposed approach for labelling of Aluminium Composite Panels.

View the Labelling of ACP products discussion paper (PDF). 

FIRST FINANCIAL DEADLINE FAST APPROACHING FOLLOWING LAW REFORMS

 

 

 

25 March 2019

Large construction companies with an annual revenue of more than $30 million have until the end of March to get their financial reports to the Queensland Building and Construction Commission (QBCC), or risk court action.

QBCC Commissioner Brett Bassett said the first deadline for new reporting reforms was at midnight on 31 March 2019.

“Under the laws which came into effect on 1 January this year, all QBCC licensees with a turnover of more than $30 million must submit their audited financial reports for the 2017/18 financial year to the regulator by the end of March,”Mr Bassett said.

“By the end of 2019, every other licensee will be required to meet new financial reporting rules.

“These new requirements help the QBCC to monitor the viability of licensees. Viable construction companies offerbetter stability for the industry and improve the security of payment for subbies and suppliers.

“Those who don’t follow the law could be subject to prosecution, financial audits and, where appropriate, licencesuspensions or cancellations.”

The Commissioner said that of the 855 licensees in categories 4 to 7, who have an annual revenue of more than $30 million, the QBCC had so far only received financial reports from 171 licensees.

Many of these licensees are large multi-national companies operating across the country. “Earlier this month we suspended the licence of construction giant Laing O’Rourke Australia Construction Pty Ltd forfailing to meet minimum financial requirements,” Mr Bassett said.

“Let me be clear – if you are operating outside of the law, we will take appropriate regulatory action.

“Part of our job is to ensure Queensland’s building and construction industry is safe, stable and sustainable, and if big companies are operating with unacceptable financial risk, then we will be taking regulatory action.

“We must work to protect the sector from serious financial harm. When big companies collapse, it has a devastating impact on the industry.

“The new annual financial reporting requirements will help the QBCC to better protect subbies, suppliers, othercompanies, homeowners and investors from potential financial detriment when licensees are operating with poor financial health.”

For instructions on how to submit the financial documents, visit www.qbcc.qld.gov.au/financial-reporting-licensees. The QBCC website also has a licensee search function for consumers.

The QBCC will also send reminders to licensees who are yet to provide their information.

© Queensland Building and Construction Commission 2014. ABN 88 568 500 260 Queensland Government